what if a taxpayer dies and owes the irs money?

The "people who paid for her funeral" do not get reimbursed out of the estate until all other legitimate creditors, INCLUDING THE IRS, have been paid. Assuming you are the administrator of her estate, you have a legal obligation to pay her legitimate debts FIRST.

Are you sure her taxes were done correctly? $4000 is quite a bit for the average person to owe.

Calling the IRS was something you were allowed to do. However, you weren't your dad, your mother or the executor on file so the IRS representatives can't tell you anything. They can notate the account and forward it to the collections area. That area will contact your mother for more information. Your contention that the estate is insolvent (no remaining assets to pay the remaining debts) needs to be verified. If they can determine that your mother got nothing from your father, has nothing from your father and the debt from 2007 is NOT from a joint return, they may in fact close the account. Without account printouts it's hard to know exactly what happened. You say the letter states 2007 only. You also seem to believe that your dad has not been working in a long time because of his illness, so you don't think he even filed. The problem is, when someone doesn't file, the IRS computers run a document matching program based on the forms they have copies of. In addition to W-2s, the IRS gets 1099s. If your father liquidated assets such as stocks and bonds, he would have gotten a 1099-B. If your father emptied an IRA or 401K plan, he would have gotten a 1099-R. When there is no tax return, the IRS first asks for it and then finally does one for you. Since they don't have input from the spouse, the form is filled out as married filing separately, uses the standard deduction, one exemption and the totals from the forms. the 1099-B sales are a problem as the IRS knows the total the assets were sold for, but not the cost basis. Items sold at a loss will look like a gain. This can easily create a huge tax bill. To research this is a problem. You need the executor to contact the IRS and ask for copies of the income transcript and account transcripts and then have an enrolled agent decode them for you. If the issue *is* cost basis and you can find his records, the return for 2007 can be filed and the debt reduced. If there are records showing the medical expenses incurred in 2007, itemizing them could also reduce the debt. Showing there wasn't a debt is also a way to stop the letters.

Irs Deceased Taxpayer

IRS gets paid before the funeral people.

Check with a lawyer BEFORE you pay the funeral expenses.

If the IRS has priorty and you give the money away, you will become responsible for the amount owed to the IRS up to the amount you gave away.

http://www.irs.gov/irm/part5/irm_05-017-013.html

So are you the trustee executor administrator of the estate at this time in your life for this purpose.

A personal representative of an estate is an executor (executrix), administrator (administratrix) or anyone who is in charge of the decedent's property. The personal representative is responsible for filing any income tax return(s) and the estate tax return when due. Please refer to Publication 559, Survivors, Executors, and Administrators, for additional information on personal representative responsibilities.

The filing requirements that apply to individuals will determine if a final individual income tax return is required for the decedent. Refer to Publication 17, Your Federal Income Tax, for additional information.

Whether income must be included or deductions may be taken on the final return is determined by the method of accounting used by the decedent. Most individuals use the cash method. Under this method, the final return should show only the items of income the decedent actually received, that were credited to his account, or that were made available to him without restriction before death. Generally, expenses the decedent paid before death should be deducted on the final return. If the decedent used the accrual method, refer to Publication 559, Survivors, Executors, and Administrators, and Publication 538, Accounting Periods and Methods, for further information.

Please add the word "Deceased" after the decedent's name in the name and address section of the final return. Also, please add the date of death across the top of the final return. If the decedent is due a refund, it may be necessary to file Form 1310 (PDF), Statement of Person Claiming Refund Due a Deceased Taxpayer, with the return. If you are a surviving spouse filing a joint return, or a court appointed or certified personal representative filing an original return for the decedent, you do not have to file Form 1310. Personal representatives must attach to the return a copy of the court certificate showing the appointment.

If a personal representative has been appointed, that person must sign the return. If it is a joint return, the surviving spouse also must sign it. If you are a surviving spouse filing a joint return and no personal representative has been appointed you should sign the return and write in the signature area "Filing as surviving spouse." A surviving spouse can file joint returns for the taxable year in which the death occurred and, if the death occurred before the date that the decedent's return for the immediately preceding year was due, for the taxable year immediately before the year of death. If no personal representative has been appointed and there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as "personal representative."

Please refer to the Form 1041 Instructions to determine if a Form 1041 (PDF), U.S. Income Tax Return for Estates and Trusts, is required to be filed.

You may have to file Form 706 (PDF), United States Estate (and Generation Skipping Transfer) Tax Return. Please refer to the Form 706 Instructions to determine if a Form 706 is required to be filed.

For more information go to www.irs.gov and use the search boxes for Publication 559 Survivors, Executors, and Administrators

This publication is designed to help those in charge of the property (estate) of an individual who has died (decedent). It shows them how to complete and file federal income tax returns and points out their responsibility to pay any taxes due.

A comprehensive example, using tax forms, is included near the end of this publication.

For more information the enclosed web site has some very useful information that you can use.

http://taxtopics.net/topic4.htm#decease

http://www.irs.gov/taxtopics/tc356.html

You also do not want to forget about the state tax returns.

http://turbotax.intuit.com/tax-tools/tax-tips/Fami...

Death in the Family

Hope that you find the above enclosed information useful and good luck to you. 03/01/2013

I realize that ths may sound morbid, but please dont take it that way. The person is dead, why would you file taxes for a dead person? Who are they going to go after? Were you the trustee on the ESTATE? Or the next of kin? There is a big diffrence! Trustee, YOU owe the money. Next of kin you dont owe the money. Its as simple as that..... But why would you file a tax return on a deceaseed person, unless you were tryng to make money off of the deceassed?

This may interest you!!!

http://www.youtube.com/watch?v=5K41O2QfpjA&feature...